The Foreign Investor Guide to Real Estate in HCMC

By:
Eric Le Dreau

Are you a foreign investor and want to know about real estate laws in HCMC? Confused by the new Property Law? Indochina Legal clears up the confusion:

One of the most notable changes introduced by Vietnam’s new 2014 property law and its regulations is the revision of the right for overseas Vietnamese, foreign individuals and organisations to own residential houses, as follows:

Overseas Vietnamese (or Viet Kieus) can now own residential houses in the same way as Vietnamese citizens without further residency requirements or any limitations on the type or quantity of houses, or the terms of ownership. They must hold a valid passport with an entry verification stamp marked by the Vietnamese Immigration Department (VID) and a document evidencing their Vietnamese origin.

Foreign individuals have the right to own residential houses, subject to certain restrictions as compared to Vietnamese citizens and Viet Kieus. In order to own houses, a foreigner is required to have a valid passport with an entry verification stamp marked by the VID and cannot fall under diplomatic or consulate preferences and immunities. Requirements of residency, investment in Vietnam, work permit, social contribution and/or marriage to a local Vietnamese is not necessary for residential housing ownership. However, as to ownership duration, foreigners married to Vietnamese citizens or to Viet Kieus are entitled to an indefinite term, whereas foreigners who are not can only own residential housing for a period of 50 years. This can be extended for another 50 years, subject to approval by the provincial People’s Committee where the house is located. Unlike other foreigners, those who are married to Vietnamese citizens are also exempt from notifying the housing administration authority at the district level prior to leasing their houses to others. Apart from that, the new legal framework grants foreigners the same rights of Vietnamese in the cases of subleases, mortgages, etc. of residential housing.

Photo by: Manh Hai

Foreign organisations are allowed to own houses provided that (i) ownership term shall not exceed the period stated in their investment certificates issued by Vietnamese competent authorities, including any extensions; (ii) use of the houses is for residential purposes only, for their personnel; and (iii) lease-out of the houses is not permitted.

It is worth noting that foreign organisations and individuals shall not collectively own more than 30% of the total number of apartments in an apartment building or not more than 250 separate houses in an area where population is equivalent to that of a ward. In addition, house ownership beyond real estate projects (e.g. a villa built by individuals) is not allowed. For national defense and public security purposes, foreign individuals and organisations cannot own houses in certain areas. With respect to these limitations, the local Department of Construction will publish on their official website the projects where foreigners cannot own houses, detailed numbers of apartments or separate houses eligible for foreign ownership, and the number of houses where foreign ownership has been recorded. To our understanding, the database is not yet completely developed for all cities and provinces in Vietnam. Meanwhile, payment for purchase or lease of residential houses shall be made via credit institutions operated in Vietnam. So far there has been no specific instruction on foreign exchange control for relevant inbound and outbound foreign funding of residential housing.

Despite certain remaining limitations, the NHL has provided a more open approach to ownership of residential housing for foreigners. The hope is that these changes will ultimately defreeze the real estate market and create a new wave of foreign investment in Vietnam.

Website: www.indochinalegal.com

How to Buy a House or Land in Vietnam?

By:
City Pass Guide

Foreigners who are living in Vietnam may purchase houses for the expressed purpose of dwelling in it. By Vietnamese law, land is a national good, so you can only own the structure built on a property, not the land that it is on. You can enjoy a “land use right” for up to 50 years. This duration can be renewed. Also note that if you’re married to a Vietnamese citizen or a Việt kiều, you will have the same ownership rights as Vietnamese citizens.

Seek professional advice to ensure that all steps are properly taken to ensure a troublefree property transfer.

Alternatively, according to Vietnam’s Housing Law, every foreigner who has a Vietnamese visa stamp on their passport can buy a property in Vietnam. However, if you enjoy diplomatic or consular immunities and privileges, this does not apply.

Besides individuals, foreign companies, branches, representative offices of foreign companies, foreign investment funds and branches of foreign banks that are operating in Vietnam are also entitled to purchase property of residential projects.

What are the limits of foreigners’ rights on residential property in Vietnam?

The law states that foreign individuals and entities may only buy, receive or inherit apartments and houses in commercial projects and not in areas that limit or ban foreigners.

Although the limit of one property per foreigner has been repelled, the new Housing Law sets a limit on the proportion of foreigners who may live in a determined area: the total number of units owned by all foreign buyers must not exceed 30% of the units in one apartment building, or 250 landed property units in one ward.

The duration of the tenure is supposed to be equal to the land use right owned by the developer, most likely 50 years, with an option to extend the land use right at the end of it. The exact conditions for the extension are still unclear and will be detailed in further regulations.

An expatriate may lease his/her property for any purpose that is not banned by law, but he/she must inform the provincial house management agency before leasing the property. In this case, he/she is subject to Vietnam’s property taxes. If you are an overseas Vietnamese or if you are married to a Vietnamese citizen, you are entitled to a freehold tenure on the property.

If you bought it, you could of course decide to live in the house but also lease it or pass it through inheritance to someone else without any difficulties. To lease it, you will need an administrative authorisation from the Housing Department of the People’s Committee where your property is located.

Foreign-invested enterprises that operate in Vietnam under the investment law but are not engaged in real estate, can purchase residential houses for their employees. They must possess investment certificates or written certifications of investment activities as appropriate to investment forms specified by the investment law granted by a competent Vietnamese state agency. They can buy properties to house their employees, but are not able to use them for leasing or other purposes.

What are the steps to purchase a house in Vietnam?

1. Once you have chosen the property, you will have to sign a reservation agreement.

This legally links the buyer and seller and may include paying a deposit to the seller. Examine closely the reservation agreement before paying the deposit. It prescribes that if the buyer changes his mind, he will lose the deposit, and if the seller changes his mind, he will have to pay twice. You’re well advised to notarise this document to protect your interest.

2. Due diligence is the next step.

You will check the reliability of the seller by examining their ID or registration certificate along with the property’s certificates (for example the ownership certificate). You should also ask for a bank guarantee or insurance to ensure the seller is trustworthy.

3. Once due diligence has been satisfied by both parties, they confirm their engagement and interest by signing the housing contract.

An annex related to facilities that go with the apartment is advised. Make sure the agreement is signed by all related parties and if not, then by the representative who is mandated by the related persons. The contract on residential house purchase and sale must be in Vietnamese, so you will need a Vietnamese translator to help examine its content. Although many developers provide a bilingual version of the contract for a better understanding by all parties involved, only the Vietnamese version is valid under Vietnamese regulations. To help you with the complications involved with the contract, we list some details to look for before signing:

- Is it stated that the seller has the ownership certificate of the apartment and does he give a guarantee over this ownership?- Is the apartment also a security for a loan? - What are the responsibilities of the seller in case of dispute over the apartment ownership due to his fault?- Methods used for payment?- What are the responsibilities for tax and fees?- What is the delivery time?

4. Paying taxes and fees.

Normally, if there is no other agreement between parties, the buyer pays the registration fee and the seller pays income tax. The payment shall be made at the tax department of the district where the house is located.

5. The last step is to apply for an ownership certificate.

Both parties can agree on how to handle issuance of the new certificate, although it is most likely that a buyer will have to take it up.

Buying Property in Vietnam

By:
City Pass Guide

Vietnam property ownership for expats is a dilemma that has been here as long as the expats themselves. You come to Vietnam, fall in love with the country and settle down. But where will you live? Is it going to be rental property forever? You don’t intend on leaving so why not buy? It may surprise quite a few to realise that it is not as fraught with danger as you may think. It is certainly easier than in Thailand, and there is a lot less chance of you losing your hard earned money.

Vietnam Property Law Changes

The government changed the rules in July 2015, enabling foreigners to buy their dream home here, provided they match a few criteria. Anyone buying property here now has a lease of 50 years, with the ability to sell-on and transfer the lease.

According to the new law, foreigners and foreign entities will only be allowed to buy or take ownership of apartments and houses in commercial projects. They will still not be allowed to buy in areas that limit or ban foreigners. A maximum of 30% of apartments within a given block and 250 houses in a given ward will be available to expats. The 50 year lease will be able to be extended in the future, although details of exactly how this will be done will change over time.

People may think that not being able to buy the land and only the building upon it is unfair, but this is the same for the local population. The government maintains ownership of the land here. Since the announcement, a property market that was already heating up has really opened up and enabled foreigners to join the Vietnam property ladder. The country already had a strong economy and a very strong and vibrant middle class.

These new rules also apply to long term Vietnamese who, living abroad, have kept up their Vietnamese citizenship. With 4.2 million Vietnamese living overseas and about 30,000 high earning foreign executives working and living here (CNBC), the potential for local real estate companies is huge.

Big Changes for Ho Chi Minh City

The drive to modernise the city has meant that developments are springing up everywhere. The new prestigious tower being built in District 1 by Vinhomes is seen as a symbol of the future. At 461 metres, the Landmark 81 tower will be the tallest building in Southeast Asia.

Vietnam’s economy has a steady growth rate of over 5-7% per year. Almost 42,000 apartments were launched in 2015 with a record 36,000 of them being sold (Vietnambreakingnews.com). Vietnam does certainly look like a great place in which to invest. In Ho Chi Minh City, The top end properties are priced at $3,000 to $5,000 per square metre. This is way below the $9,375 per square metre you would have to cough up in Bangkok (Financial Times). And yet, rental yields here are 1.5-2.5% higher than those in Bangkok, Hong Kong and even Singapore, according to VinaCapital.

Top 10 Real Estates Websites in HCMC

By:
Luke Nguyen

Buying, selling or renting a house in Vietnam, easy though it sounds, can be a challenge for a foreigner. The country’s real estate transactions have been based heavily on the traditional method of having an agent (or “co” - the housing stork) do all the work. People are now becoming more proactive in their choice of creating a home and taking advantage of online information to save costs and time.

Here are our top 10 picks for quality real estate websites in Vietnam. Despite the fact that only a limited number of them have a proper English interface, their information is valuable and can be translated easily using Google Translate.

When it comes to housing and real estate, Bat Dong San is no doubt the number one portal in Vietnam. With the largest amount of information in its field, continuously updated and presented professionally in both Vietnamese and English, it satisfies a wide range of enquiries from visitors. Besides real estate information, it also provides visitors advice on architecture, construction, interior and exterior decoration, legal issues and feng shui.

With a friendly website layout, Mua Ban Nha Dat is a great source providing online solutions for marketers and real estate brokers. For investors, brokers and individuals who are active in the field, this site is one of their first choices to get quick market updates and details on upcoming real estate projects all over the country with a few quick clicks. The only downside is that they don’t have an English user-friendly interface, but as mentioned earlier, Google Translate can be a good way to explore.

Zita is one of the newest additions to the Vietnamese real estate field. With its clean, sleek layout including a city view home page video, Zita sets itself apart from the other competitors. The information on the site is presented beautifully with a neighborhood browsing feature and an interactive map for visitors.

Do Thi provides the fastest and most accurate market information in Vietnam. Through the advanced site browser, users can find all about buying, selling, renting across all provinces and cities in the country. News and featured projects sections are updated daily to keep visitors informed on the latest buzz in the field.

With over 2 million real estate listings and an average of 5,000 housing posts per day, 123 Nha Dat provides market information, and post-purchase education and lease-free housing. Users can search for land, houses and apartments.

Cafeland is one of the leading real estate sites in Vietnam. Besides housing information, the website also provides up to date news and market analysis from experts in the field. The site also has a portfolio section which provides key details on real estate with specific and neatly presented information.

Dia Oc Online aims to contribute to the sustainable growth of information-sharing and real estate infrastructure in Vietnam. Besides housing listings and information, consultancy on decoration, interior design and feng shui are also provided to users for reference. The featured agents section is also very interesting and informative.

This website lives up to its good name by providing qualified property valuation software to assist customers with making buying decisions easier. Besides real estate news and tips, Dinh Gia Nha Dat also features a cheap land and housing section and a promotion and auction space for buyers and investors.

Kenh BDS supplies a wealth of resource materials for home buyers and sellers for big cities in Vietnam. The website is presented so that both buyers and sellers can make the most of its user-friendly interface and information.

Gateway Thao Dien: Refined Living in Saigon

By:
City Pass Guide

Designed with an “inside out” perspective in mind, Gateway Thao Dien’s units, especially the duplexes, garden villas and penthouses, are going to make a deep mark in the housing industry.

In a city like HCMC, space is always an issue. Confined apartments, restaurants and bars hidden up curving stairways, offices and houses built half an arm's-length away, all make it difficult to feel you have enough space. However, modern accommodation is about to change with SonKim Land and Hamon Developments’ luxurious, new housing project aptly named Gateway Thao Dien.

The project, even when compared to first class housing in other districts, is the first of its kind in HCMC. It will undoubtedly set the bar for future developers, and serve as a model for the style of living that today’s high-end, international clients are seeking, yet cannot find.

Gateway Thao Dien’s units are intimate, exclusive and part of their own special, unified community. They are simple, but shining with elegance. They are intellectual in their architectural presence and layout.

Carefully Designed for International and Intellectual Needs

Serious attention has been put into the tiniest of details in order to create a peaceful community for everyone to enjoy. The developers collaborated with a Hong Kong-based interior design company B & Co, to create a brand new kind of living experience - one with a striking balance of emotion and practicality. Upon entering the welcome center, the elevator entrance area, and lastly into your specifically crafted home, you will feel genuine comfort. A personal and harmonious feeling in which now you can finally relax in your perfectly customized environment.

The designers and architects behind the physical layout of Gateway Thao Dien had a very unique and specific plan for the development of these truly inspirational units. Keeping in mind the needs and preferences of its potential inhabitants, they worked tirelessly to create an atmosphere that is timeless, crosses international lines and strikes a humble balance between East and West.

Modern, Digital and Accommodating

The developers and B & Co have carefully chosen each and every accessory, from the building material, to the appliance brand, and even the bedding and cutlery. Attention to detail is going to be the key to their success. Each room has concealed air-conditioning with digital controls, and intercom systems have been installed for convenience. There are also double headed showers, private pools, jacuzzis, gardens and barbeque areas. The interior has been carefully arranged to maximize the amount of natural light that enters the house from nearly every possible angle. There are panoramic views of the city or river in every apartment, with some glass facades as big as 7.2 metres high. From your home sofa you can see the Saigon river, natural vegetation, the bright lights of the city centre, and the outskirts of the downtown area. This gives one the sense that they are outdoors even while they are in the comfort of their own home. The spaces are warm and contemporary, while complimenting the Eastern culture with artwork and decoration throughout the units. The DNA of the design is very clear- it’s modern, timeless, borderless, and full of embrace.

As with most exclusive, top-notch boutique housing, a buyer should always have the chance to modify their home to fit their individual needs. Without compromising the already flawlessly balanced interior, there are several personalized customisation options for the owners. Gateway Thao Dien is happy to accommodate unique modifications so the client can put their own stamp on the unit.

The developers work carefully with their clients to ensure they feel in paradise at their own home, and that people from all walks of life can feel a sense of equality and safety in the unique community that will arise as a result of this ambitious project.

Apart from work and social life, finding quality accommodation in a suitable area of town is one of the most crucial factors in choosing a place to live in HCMC. The city has a plethora of options available to suit all tastes and budgets from low-cost studio apartments to international-standard luxury homes.

The decision will depend on several factors: what type of accommodation you prefer to live in and can afford, what part of town you want to live in, and what amenities come with your future home. Different districts offer different vibes, from the hectic night-life and tourist buzz in D1 to the almost suburban peace of D2 about 20 minutes away from the central business district (CBD).

District 1

Wards: 10

Area: 7.72km2

Population in 2011: 185,715

The reverse L-shaped D1 is the location of HCMC’s Central Business District (CBD) and where the bulk of the city’s Western restaurants, clubs, and bars, along with tourist destinations, are situated. It is not surprising that rental prices here are the highest in the city, while backpacker and tourist accomodation is plenty. Another notable area of D1 is what is described as HCMC’s Little Tokyo located on Le Thanh Ton Street.

District 2

Wards: 11

Area: 49.74km2

Population in 2011: 136,497

Rife with modern high-rise developments, D2 is the up and coming district in town. Passing under the Saigon Tunnel and seeing the dust in the distance will give an indication of the city’s plans to create a second CBD, about a 20 minute drive from D1. Expat enclave Thao Dien ward contains two of the most prestigious international schools, villas, and compounds along with a fair bit of western restaurants and bars.

District 3

Wards: 13

Area: 4.92km2

Population in 2011: 188,898

Bordering D1 in the centre of HCMC, D3 is quieter, more local, and a touch more scenic than its manic neighbour. The tree-lined avenues snake around a smattering of foreign consulates, French colonial buildings, and up and coming dining venues, creating a modern and progressive atmosphere to compete with D1’s plethora of tourist attractions and historical monuments, buildings and museums.

District 4

Wards: 15

Area: 4.18km2

Population in 2011: 183,043

The smallest district in HCMC, D4 is sandwiched between Districts 1 and 7. This densely populated district had a reputation as one of the roughest districts in the city due to its past with organised crime but has cleaned up quite a bit in the past few years. It is also known for its cheap eats and has some of the best street food in the city. Be careful with your possesions here but don’t be afraid to visit this beautiful slice of real HCMC life.

District 5

Wards: 15

Area: 4.27km2

Population in 2011: 175,217

Just to the west of D1, this district is also known as Cholon, and is home to the city’s Chinese population. A teeming hub of activity, this district hosts the largest market in Vietnam, a deluxe shopping mall, along with several Chinese pagodas. It is also known for its cheap and delicious Chinese restaurants, and can be easily visited on the no.1 bus from Cong Quynh street. Definitely worth a visit!

District 7

Wards: 10

Area: 35.69km2

Population in 2011: 265,997

D7 feels like a sort of alternate universe, especially in contrast to other sections of town. The streets are wide and the atmosphere is mostly free of the blaring horns of downtown Saigon. The district is home to a large population of Korean expats and is the place to go for great Korean food. Inside D7 is the satellite city of Phu My Hung which is characterised by tall apartment blocks and modern shops and restaurants.

Phu Nhuan District

Wards: 15

Area: 4.88km2

Population in 2011: 175,631

Bordering D1 but not at all central, Phu Nhuan is about a 15 minute drive from the central business district (CBD). This bustling district has one of the highest population densities in the city and can be a bit manic to live in. But the streets are interesting, the people friendly and the street food is delicious, and if you are looking for some escape from the madness, Phu Nhuan has a number of quiet parks to chill out in.

Binh Thanh District

Wards: 20

Area: 20.76km2

Population in 2011: 479,733

This district is heavily used for transit from Districts 1 and 2. However, it has become a magnet for higher-end apartment blocks such as the Manor and Saigon Pearl due to its close proximity to D1. Though the area is known for being densely populated, it is also home to the Thanh Da Island area which has some of the greenest spaces in town. Binh Thanh is a great district for cheap, delicious street food.

Tan Binh District

Wards: 15

Area: 22.38 km2

Population in 2011: 430,350

Tan Son Nhat International Airport is located in this district. Once the largest district in the city, it was broken up in two parts to create Binh Tan and Tan Phu districts in 2003. The Japanese shopping mall, Aeon Mall is also located here and is known as one of the best malls in town.